Tom Marshall bracing people for bad budget

Traditionally, the finance minister wears new shoes on budget day, but Tom Marshall is trying to lower expectations on everything this year.

“Too expensive,” he said. “Deficit year. Maybe I’ll skip it for a year.”

For the past year, the government has been trying to downplay expectations.

While Tuesday’s budget probably won’t be anything spectacular, the situation probably won’t be as dire as some people expect.

This is this is the first year when the provine won’t receive Atlantic Accord payments from Ottawa, which will punch a $536 million hole in the budget according to Marshall. And oil revenue will be down as the Terra Nova production vessel comes offline for 147 days for maintenance, and the White Rose is taken offline.

This time last year the government was predicting the province would face a $496-million deficit. During the provincial election, every PC party campaign promise came with a caveat — “we’ll do this if we can afford it.”

More recently, Premier Kathy Dunderdale said she isn’t really thinking about new government spending, and will look at making budget cuts wherever possible. Dunderdale went so far as to suggest hundreds of temporary workers within the civil service could be on the chopping block.

It’s safe to say, though, that it won’t be as bad as all that.

Governments always carefully manage expectations so they come out looking better, and already a CBC report suggests budget cuts will be in the “dozens” and not the hundreds.

The budget deficit will almost certainly be lower than half a billion dollars too.

For one thing, in 2011 the government spent $1 billion on infrastructure. Even if they cut that down by a little bit, it would still take a big bite out of the deficit.

Dunderdale basically already said as much to reporters following the throne speech last month.

“”It’s time to rein in our spending on infrastructure particularly,” Dunderdale said. “We’re going to maintain good service delivery. We’re going to meet the needs of the people of the province, but we don’t want expectations to be very high on new initiatives in the budget.”

Similarly, last year the government transferred $348 million to Nalcor; if they don’t do that again, it would cut the deficit down by a whole lot.

The lowered expectations from government, though, is more about getting interest groups ready, because there will likely be no big government gifts coming.

During pre-budget consultations Marshall made it clear he wasn’t interested in hearing “wish lists” from anybody.

Mayors from across the province have been pressing for a new funding formula for municipal operating grants. Memorial University president Gary Kachanoski said earlier this month the university needs a new 300,000-square-foot engineering building — at a price tag of around $250 million. That likely won’t happen either, although there may be some preliminary money for “design work” or something similar.

The bottom line, Marshall said Friday, is the provincial government is in a fiscal tight spot right now, and the top priority is figuring out how to squeeze through.

“People know what the big issue is this year, we have a fiscal challenge,” he said. “Obviously we have to manage our way through that. Now fortunately, because of the fact that we’ve been able to run surpluses for six out of the last eight years, we have been able to accumulate liquidity and pay down debt which gives us capacity to manage through two years of deficits.

“(On Tuesday), we’re going to lay out a plan that’ll show how we intend to do that.”

Comments

Comments

Your name*Email*Comment*

Recent comments

Gord

April 23, 2012 - 22:20

I've been around for many a year now and this is routine like doing your tax return, you hope for good news but are prepared for the other only not sure how bad. If I wake up tomorrow and can get up on my own and find something to eat then I'm doing ok. "a simple life has it's own rewards" - don't sweat the small stuff people!

Hold on Newfoundlanders and Labradorians, we haven't seen nothing yet. The idiots in that PC governement can't give the people of the province ANYTHING. I though they said we will be a have province even without the equalization payments. What a stupid bunch of morans calling themselves THE GOVERNMENT. In another year or two we will be worst off then we ever were. Just wait and see. KATHY THUNDERDALE and her clowns are THE BIGGEST JOKE in the world...........................THE BIGGEST EVER!!!!!!!!!!

more hot air coming from politicians. how can all of them balance the books when they missed their own deadline dealing with their own fat salaries, expence claims, and how can we all forget their fat pension, for little or no work. WHAT A JOKE !

This government went into a provincial election knowing full well the Atlantic Accord deal was expiring, and the massive hit on the treasury that would ensue.They said nothing. They know they are going to be getting hammered in the equalization war coming up next year between the provinces and the federal government - they haven't said anything. They are building a road to Muskrat Falls while conducting "studies" and having debates in the House of Assembly. They have no respect for their own people.

I thought King Danny told all his loyal followers we didnt need Ottawa and their transfer payments we are a HAVE province.. Marshall was Finance Minister. Tell us what happened Tom? Why are you never even close with your estimates? Easy job you have Tom...just blame Ottawa for everything that goes wrong and take the credit for whatever may go right...Danny trained you well Tommy my boy. Very well indeed.

New shoes are to expensive? How about that Muskrat Falls? Hundreds of millions spent already. It's hard to know what to believe from the Minister anymore. His past predictions have been so far out of whack.